quote:

Originally posted by St_Andrew -Is is one of the main reasons for third world countries to not develop faster.

I've lost count of how many times Brazil won causes at the WTO because of this... if it damages an economy reasonably developed like ours, I can't imagine what happens to poorer countries.

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Originally posted by Lira I've lost count of how many times Brazil won causes at the WTO because of this... if it damages an economy reasonably developed like ours, I can't imagine what happens to poorer countries.

Exactly, its insane!

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BURKINA FASO, in west Africa, depends on cotton for about 40% of its merchandise exports. Alas, prices are not always what they might be. According to the International Cotton Advisory Committee, a body that advises governments, world prices would have been about 26% higher in the 2001-02 season were it not for the $4 billion in subsidies America lavished on its cotton growers.

Source:
http://www.economist.com/finance/di...tory_id=3786899

Basically, subsidies supress the price of produce hurting those countries which are trying to get into world market. Lets also note that not all third world countries are exporters of farming produce, and often have to import their food stocks. If the subsidies are removed they'll have to pay more for their imported food.

Last edited by Dupz on Apr-10-2005 at 10:11

Just like any other time the government has fuct up by distorting the market, we should not hold back and rectify the problem as soon as possible.. Sure, there's going to be short term problems while we're in transition (ie, the food importing 3rd world countries will suffer), but we might as well take the knock on the chin and right our wrongs. We'll be better off in the long run.

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Originally posted by Dupz Just like any other time the government has fuct up by distorting the market, we should not hold back and rectify the problem as soon as possible.. Sure, there's going to be short term problems while we're in transition (ie, the food importing 3rd world countries will suffer), but we might as well take the knock on the chin and right our wrongs. We'll be better off in the long run.

what's wrong with a gradual reduction?

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The only good argument I have heard for agricultural subsidies was political rather than economical. I'm notoriously against all agri subsidies but there is some justification to support them. The main justification is that you want to maintain a healthy agricultural industry at home in the event that a crisis prevents you from importing agriculture and people starve due to insufficient supply to meet demand. It's somewhat analagous to not outsoucing your military to mercenaries because a worst case scenario could be pretty bad. It's a somewhat weak argument, but it's sufficient for me to support a minimal amount of agri subsidies.

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Originally posted by occrider The only good argument I have heard for agricultural subsidies was political rather than economical. I'm notoriously against all agri subsidies but there is some justification to support them. The main justification is that you want to maintain a healthy agricultural industry at home in the event that a crisis prevents you from importing agriculture and people starve due to insufficient supply to meet demand. It's somewhat analagous to not outsoucing your military to mercenaries because a worst case scenario could be pretty bad. It's a somewhat weak argument, but it's sufficient for me to support a minimal amount of agri subsidies.

I have heard similar arguments and i agree its a weak argument! but i dont even think it is enough for me to support minimal amount of agri subsidies! The chances of that happening, are so small. Also there will still be a great amount of farming left, before Sweden joined the EU we actually cut more or less all the subsidies, and we still had lots of farmers, even tho many of them (esp the small ones) went out of buisness. So farming will still excist due to the big demand of products from home, or organic products or so... And in the unlikely event of the world going crazy making it impossible to import agricultue products, then we would have lots of problems more than the agriculture one so ppl not beeing able to enjoy the luxary lifes of unlimited food like they did before, would just be one of many problems.

Historically farmers have very strong lobby groups,and because they are literally at grassroots level a lot of local politicans in rural areas lobby for them also...this is certainly the case in Ireland.

Ther is also a massive amount of fraud carried out by farmers as regards subsidies all over europe,i know that in europe they now have a very sophisticated satalite system in place to prevent such fraud,they had one previously but it wasnt very good,basically the satilate system can take very detailed images and if a farmer puts in a claim for say growing a certain acerage of cereal or whatever,the satalite has the capability to check that that amount of acerage is auctually growing crops...now they obviously dont check every farm,but they will check randomly and also check farms where spurious claims have been made in the past.

The Italians were very good in the past for making fraudulant claims worth hundreds of millions,but also in Ireland after the foot and mouth disease in the UK,dozens of farmers were prosecuted for claiming for farm animals that didnt exist,as the government decided to do an audit to see the extent of damage if Ireland was to become infected with foot and mouth disease...its a widespread problem all over europe.

But in Ireland at the moment as farming becomes more intensive,smaller farmers are leaveing the land and getting more mainstream jobs in industry etc or a lot have become part time farmers,and the main problem now is that they are selling parcels of their land to build one off houses to make money,and this happening everywhere....and this seems to be one of the main farming activities at the moment,selling an acre here and an acre there...and making an absolute fortune in the process(an acre of land with planning permission for a house would cost about 100,000 euro minimum)

They have it every way in this country subsudies or not.......

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Originally posted by Yoepus what's wrong with a gradual reduction?

Gradual reduction is probably the best way of dealing with the situation. It's probably the only way that we could introduce sounder economic policy while promoting harm-minimisation in the short-run.

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